HomeMy WebLinkAbout00-181 t V
Resolution No . 00-181
RESOLUTION
AUTHORIZING EXECUTION OF A SECOND AMENDMENT TO
REDEVELOPMENT AGREEMENT WITH LEROY A. FITZSIMMONS
FOR THE DUNDEE/SUMMIT TIF DISTRICT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Ed Schock, Mayor, and Dolonna Mecum, City
Clerk, be and are hereby authorized and directed to execute a
Second Amendment to Redevelopment Agreement on behalf of the
City of Elgin with Leroy A. Fitzsimmons for the development of
the Dundee/Summit Tax Incremental Financing District as a
professional office complex, a copy of which is attached
hereto and made a part hereof by reference .
s/ Ed Schock
Ed Schock, Mayor
Presented: August 9, 2000
Adopted: August 9, 2000
Omnibus Vote : Yeas 7 Nays 0
Attest :
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
SECOND AMENDMENT TO REDEVELOPMENT AGREEMENT
This Second Amendment to the Redevelopment Agreement is
made and entered into this 9th day of August, 2000, by and
between the CITY OF ELGIN, ILLINOIS, a municipal corporation
(hereinafter referred to as the "City" ) and LEROY A.
FITZSIMMONS (hereinafter referred to as "Developer" ) .
WITNESSETH
WHEREAS, the City and Developer entered into a
Redevelopment Agreement dated September 7 , 1999, relating to
the Developer' s redevelopment of the property commonly known
as the Dundee/Summit TIF District and legally described on
Exhibit A to the Redevelopment Agreement (such Redevelopment
Agreement of September 7, 1999, is hereinafter referred to as
the "Subject Redevelopment Agreement" ) ; and
WHEREAS, on December 21, 1999, the City and Developer
entered into a First Amendment to the Subject Redevelopment
Agreement; and
WHEREAS, by way of letter from Developer ' s attorney of
May 3 , 2000 , Developer has requested further amendments to the
proposed Subject Redevelopment Agreement; and
WHEREAS, the City has agreed to certain further
amendments to the Subject Redevelopment Agreement as
hereinafter provided.
NOW, THEREFORE, for and in consideration of the mutual
promises and undertakings contained herein, the mutual
promises and undertakings contained in the Subject
Redevelopment Agreement, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows :
1 . That the foregoing recitals are hereby incorporated
into this agreement in their entirety.
2 . That the Subject Redevelopment Agreement as amended
by the First Amendment to the Redevelopment Agreement dated
December 21, 1999, is hereby further amended as follows :
A. That Exhibit A to the Subject Redevelopment
Agreement providing for the legal description of the Subject
Property is hereby amended by adding thereto the following
additional property:
"Parcel Four:
That part of St . John Street right of way lying
between Block 24 and Block 25 of P.J. Kimball Jr. ' s
3rd Addition to Elgin, situated in the Southwest 1/4
of Section 12 , Township 41 North, Range 8 East of
the Third Principal Meridian, in the City of Elgin,
Kane County, Illinois, described as follows :
Beginning at the Southeast corner of said Block 24 ;
thence North 0 degrees 23 minutes 42 seconds West,
254 . 06 feet (253 . 5 feet record) on an assumed
bearing along the East line of Mrs . J.R. Kimball ' s
subdivision of said Block 24 , also being along the
West right of way line of St . John Street, to the
Northeast corner of said block; thence South 58
degrees 39 minutes 45 seconds East, 58 . 20 feet to a
point on the West line of said Block 25 that is
30 . 00 feet South of the Northwest corner of said
block; thence South 0 degrees 23 minutes 42 seconds
East, 223 . 54 feet along the West line of Babbitt ' s
Addition to Elgin, being a subdivision of said
Block 25, also being along the East ROW line of St .
John Street to the Southwest corner of said
Block 25 ; thence South 89 degrees 42 minutes 43
seconds West, 49 . 50 feet to the point of beginning. "
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B. That Section 2 of the Subject Redevelopment
Agreement entitled "Agreement to Sell" is hereby amended by
amending the last line thereof to read as follows :
" . . . described; and the terms and obligation
of this Redevelopment Agreement, as amended. "
C. That Section 5 of the Subject Redevelopment
Agreement entitled "Survey" is hereby amended by adding
the following thereto:
"Developer acknowledges having previously
received from the City a plat of survey dated
July 8, 1999, revised July 17, 2000, prepared by
Dale A. Terry of Hampton, Lenzini and Renwick, Inc .
The parties agree that such survey is in compliance
with the provisions of this section and fully
satisfies the City' s obligation to provide a survey
pursuant to this agreement . Prior to closing the
City shall also provide to the Developer a plat of
vacation for Parcel 4 of the Subject Property
consisting of the portion of to be vacated St . John
Street . "
D. That Section 6 of the Subject Redevelopment
Agreement is hereby amended to read as follows :
"6 . Closing. The time of closing shall be on
or before August 18, 2000 . Unless
subsequently mutually agreed otherwise, the closing
shall take place at the office of Chicago Title
Insurance Company providing title is shown to be
good or is accepted by developer. "
E. That Section 8 of the Subject Redevelopment
Agreement entitled "Title" is hereby amended by adding the
following to the listing of permitted title exceptions :
" ; (e) the title exceptions in the Chicago
Title Insurance Company Title Commitment Number 1410
000467626 KA dated July 5, 2000, identified therein
as Schedule B Exceptions K-8, L-9, M-10 , N-11, 0-12 ,
R-13 and S-14 ; and
(f) a reservation by and for the City of Elgin
and for and to any public utility company owning any
public utility or public service facilities, in,
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•
upon or under the portion of St . John Street to be
vacated full right of access for the purpose of
continuing or extending any public utility or public
service facilities and to maintain, renew, extend or
construct or reconstruct any such public utility or
public service facilities . "
F. That Section 8 of the Subject Redevelopment
Agreement entitled "Title is hereby further amended by adding
the following thereto:
"Developer acknowledges having previously
received from the City a title commitment dated
July 5, 2000 issued by Chicago Title Insurance
Company under Order No. 1410 000467626 KA. The
parties agree that such title commitment is in
compliance with the provisions of this section and
fully satisfies the City' s obligation to provide a
title commitment pursuant to this agreement . "
G. That Exhibit C to the Subject Redevelopment
Agreement is hereby amended in its entirety as provided by
Exhibit C (Revised June 16, 2000) attached hereto and made a
part hereof by this reference .
H. That Section 14 of the Subject Redevelopment
Agreement entitled "Financing" is hereby amended by deleting
therefrom Subparagraph (A) in its entirety.
I . That a new Section 33 is hereby added to the
Subject Redevelopment Agreement to read as follows :
"13 . Vacation of Portion of St . John Street and
Improvements to Seneca Street .
A. The City agrees that as of the closing
it shall have provided for the vacation of that
portion of St . John Street legally described in
Exhibit A hereto. It is agreed and understood
that the ordinance providing for the vacating
of such portion of St . John Street shall
contain a reservation whereby the City shall
reserve for and to itself and for and to any
-4-
public utility company owning any public
utility or public service facilities, in, upon
or under said right of way to be vacated full
right of access for the purpose of continuing
or extending any public utility or public
service facilities and to maintain, renew,
extend or construct or reconstruct any such
public utility or public service facilities .
It is further agreed and understood that in the
event the Developer desires or requires the
relocation and/or undergrounding of any public
utility or public service facilities which are
located within said portion of the St . John
Street right of way to be vacated that the
Developer shall obtain the consent of the City
or the public utility owning or operating any
such public utility or public service
facilities and that the cost of any such
relocation and/or undergrounding shall be the
responsibility of and shall be paid for by the
Developer.
B. The City agrees that as part of and
conditioned upon Developer ' s redevelopment of
the Subject Property as the professional office
complex that the City shall provide for
infrastructure improvements to that portion of
Seneca Street lying within the Subject
Property. Such infrastructure improvements to
be provided for by the City shall consist of
water main replacement, new paving, new curb
and gutter, new sidewalks, new storm sewers and
new street lighting. The specifications for
such infrastructure improvements shall be
determined in the sole discretion of the City. "
3 . That in the event of any conflict between the terms
of this Second Amendment Agreement and the terms of the
Subject Redevelopment Agreement dated September 7, 1999, or
the terms of the First Amendment Agreement dated December 21,
1999, the terms of this Second Amendment Agreement shall
control .
4 . That except as amended herein and as amended by the
First Amendment Agreement dated December 21 , 1999, the Subject
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Redevelopment Agreement between the City and the Developer
dated September 7, 1999, shall remain in full force and effect .
IN WITNESS WHEREOF, the parties hereto have entered into
and executed this agreement on the date and year first written
above .
CITY OF ELGIN, a municipal LEROY A. FITZSIMMONS
corporation
By j
,.„1,,,4/
Mayor
Attest :
City Clerk
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dG Agenda Item No.
City of Elgin
°PA�/ I I
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is 11—b
May 12, 2000 �L+ �g rr r n �-'-°'`
`7s. it—. r
TO Mayor and Members of the City Council N 1pm.
FROM: Joyce A. Parker, City Manager ECONOMIC GROWTH
SUBJECT: Dundee/Summit TIF District
PURPOSE
The purpose of this memorandum is to present to the Mayor and
members of the City Council an update on the Dundee/Summit TIF
project proposed by Lee Fitzsimmons.
BACKGROUND
On September 7, 1999, the City of Elgin and Leroy A. Fitzsimmons
entered into a redevelopment agreement relating to the
Dundee/Summit TIF District. In exchange for the sale of land for
$98, 500, the developer agreed to build a 40, 000 square foot
Professional Office Complex. The complex was to consist of two one
story buildings with brick finishes and gable roofs and a third
building with two floors, with a brick finish and a flat roof. The
value of the project was estimated to be $5, 000, 000.
The developers agreed that as long as any tax incentive bonds were
outstanding he and no persons affiliated with him shall do any of
the following:
A. Seek to reduce the equalized assessed value of the
redevelopment project below $1, 750, 000 .
B. Request a full or partial exemption from general real
estate taxes.
C. Request an assessment at a value not otherwise permitted
by law.
As the developer solicited construction proposals from contractors,
the projected costs approached $5. 5 million. The increased costs
related to factors such as: water main replacement, curb, gutters,
sidewalk replacement, street resurfacing, speciality lighting and
fees and costs related to the construction of three buildings .
• Dundee/Summit TIF District
May 12, 2000
Page 2
The developer would like to continue with the project, but
incorporate some changes in the site plan that would make the
development more cost-efficient. The following changes are
proposed:
1 . Two buildings rather than three.
A. Single story brick with gable roof, 19, 600 square feet
B. Single story brick with flat roof, 10, 000 square feet
2 . Vacate St. John Street to allow for additional parking
required for the medical office use.
3 . City assure responsibilities for public infrastructure
improvements related to Seneca Street .
A. 8" water main $ 80, 000*
B. Curb, gutters, sidewalk and
street resurfacing 75, 000*
C. 14 historic style lights 84, 000**
$239, 000
• • The water and street-related improvements are based on an
existing street contract (Elizabeth/Grace/St . Charles
project) . A change order with the contractor (Cella
Construction) would be necessary.
** The lighting costs are an estimate. The lighting along Seneca
Street would be bid as part of a historic street lighting
project currently included in the 2000 budget .
It should be noted that the previous developer considered a neo-
traditional style commercial development for the site and
determined that the requirement of maintaining existing streets and
the cost related to upgrading the public infrastructure could add
up to $900, 000 to their project costs.
While initially Mr. Fitzsimmons did not request any financial
assistance from the City for his proposed development, he has come
to the realization that in order for his project to be viable, some
assistance from the City would be necessary.
Staff feels that the public infrastructure improvements proposed
for Seneca Street could be added onto an existing street contract
and the work could be completed this fall . The timing of this work
is consistent with the construction schedule proposed by the
• developer.
Dundee/Summit TIF District
May 12, 2000
Page 3
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
Th
e Northeast Neighborhood Association should be advised of the
proposed changes .
FINANCIAL IMPACT
OW6k--
Funding for the public infrastructure improvements are not
currently budgeted. Several funding options are available:
1 . Unanticipated Riverboat Revenues.
2 . Savings on current street projects .
3 . Loan to the TIF fund to be paid back for future TIF
revenues .
Should the City Council desire to fund the street and water main
improvements on Seneca Street, it is recommended that inter-fund
loans be made from the Riverboat and Water Funds to the
Dundee/Summit TIF Fund. The cost of the improvements would then be
repaid when the TIF District begins to generate sufficient tax
increment. A budget amendment may be required.
LEGAL IMPACT01-----
An amendment to the Redevelopment Agreement would be required.
65 ILCS 5/11-74 . 4-4 provides that no agreement relating to the
development of property within a TIF District shall be made without
making public disclosure of the terms of the proposal and the
procedures for obtaining bids and proposals must provide reasonable
opportunity for any persons to submit alternative bids or
proposals . Given the substantial amendment to the existing
Redevelopment Agreement being proposed by Mr. Fitzsimmons it will
be necessary to publish a public notice in a local newspaper that
a proposed Amended Redevelopment Agreement is available at the City
for review and inviting all interested parties to make alternative
proposals for the redevelopment of the project area. Such a notice
should provide a minimum of fourteen (14) days from the date the
notice is published in the newspaper to allow alternative
proposals . Following expiration of such 14-day period an Amended
Redevelopment Agreement could be submitted to the City Council for
final approval.
Dundee/Summit TIF District
May 12, 2000
Page 4
Paragraph 14 of the subject Redevelopment Agreement between the
City and Mr. Fitzsimmons provides for a financing contingency
whereby the Developer' s obligations to close under the agreement
are contingent on Developer obtaining a financing commitment in the
amount of $5 million for the construction of the proposed
professional office complex. The City granted a four month
extension to the financing contingency following Mr. Fitzsimmons
request for same in November of 1999. The four month extension on
the financing contingency expired as of March 6, 2000 . On March 2,
2000, Mr. Fitzsimmons through his attorney requested an additional
three month extension of the financing contingency in the contract
through June 6, 2000 . Because of Mr. Fitzsimmons' concurrent
request to amend the Redevelopment Agreement the City has yet to
respond to this second request to extend the financing contingency.
As a result of these continued requests for extensions of the
financing contingency the City currently does not have an
enforceable contract with Mr. Fitzsimmons.
In the event the City is to proceed with a substantial amendment to
the Redevelopment Agreement as requested by Mr. Fitzsimmons the
City Council may also wish to consider some amendment to the
financing contingency so to attempt to insure that Mr. Fitzsimmons
will in fact be proceeding with the subject development project .
The developer has agreed to delete the financing contingency in the
amended development agreement .
ALTERNATIVES
1 . Deny the request for project changes and City assistance.
Seek additional development proposals .
2 . Allow site changes proposed by the developer with the City
being responsible for public infrastructure improvements on
Seneca Street and make necessary changes to the development
agreement .
Dundee/Summit TIF District
May 12, 2000
Page 5
RECOMMENDATION
Staff recommends proceeding with alternative 2 . The developer may
reduce the number of buildings from three to two, the City shall
vacate St . John Street, the City shall make the necessary
improvements to Seneca Street and the development agreement shall
be amended through the appropriate public process .
R ctfully submitte
Jo e A. Parker
City Manager
RHM: sp
Attachments
ARIANO, HARDY, NYULI, RICHMOND & CASTILLO, P.C.
• ATTORNEYS AT LAW
FRANK V.ARIANO 474 SUMMIT STREET WILLIAM F.CASTILLO
RALPH C. HARDY ELGIN, ILLINOIS 60120-3829 (1949- 1997)
LISA M. NYULI TELEPHONE (847)695-2400 OTHER OFFICE
SCOTT G. RICHMOND FACSIMILE(847)695-8397 EFS BANK HUNTLEY
13300 S. Route 47, P.O. Box 487
KARRSTEN GOETTEL Email Address: rch@attorneys-illinois.com HUNTLEY, IL 60142
JULIO CESAR VALDEZ May2000 TELEPHONE(847)669-5020
FACSIMILE(847)669-4628
Ms. Joyce Parker, City Manager
City of Elgin
150 Dexter Court
Elgin, IL 60120-5555
RE: City of Elgin - Fitzsimmons
Redevelopment Agreement
Dundee Avenue and Summit Street TIF Property
Dear Joyce:
• A you may be aware our client, Lee Fitzsimmons has been meeting with Ray Moller
and other City staff to revise his proposed development of the East Park Professional Centre
at the Southwestern corner of Summit Street and Dundee Avenue in Elgin. After several
meetings it apparently was the consensus of City staff and Mr. Fitzsimmons that the project
be modified to provide for only two professional office buildings on the site,which eliminated
the need for a retaining waif at the West boundary of the Property and also provided a
considerable increase in the amount of available parking space. A copy of the revised site
plan prepared by Dahlquist & Lutzow is enclosed with this letter.
Under the tentative agreement reached with the City,Mr. Fitzsimmons would develop
the site as indicated subject to the City undertaking installation of all of the infrastructure
improvements on Seneca Street at the City's sole cost and expense with such work to be
performed by contractors hired by the City. The term "infrastructure improvements" with
respect to the development of Seneca Street would include water main replacement, street
improvements,curb and gutter improvements,sidewalks,storm sewers and special lighting.
Under this arrangement the City would also vacate St.John Street between Seneca Street and
Summit Street, so that it might be used as access to the Fitzsimmons parking areas and
would no longer be a through street. All other site development costs would be paid by Lee
Fitzsimmons as the developer.
If the foregoing modification to the proposed East Park Professional Centre is
• acceptable to the City staff, we will appreciate it being reviewed by the City Council at its
executive session on Wednesday, May 24, 2000, with the hope that final public approval
could be given on or about June 14, 2000. Assuming this modified proposal is approved
Ms. Joyce Parker, City Manager
May 11, 2000
Page 2
by the City in writing, Mr. Fitzsimmons will waive his financing contingency and agree to
close on or before June 30 2000 pursuant to the Redevelopment Agreement dated
September 7, 1999 between the City, as Seller and Mr. Fitzsimmons, as Purchaser, as herein
modified.
If you or the staff members involved have any comments on this proposal prior to
submitting it to the City Council for review, please contact my office or Mr. Fitzsimmons
directly. Thank you very much for your consideration of this request.
Very truly yours,
py
Ralph C. Hardy
Ariano, NyHardy, uli,
Richmond & Castillo, P.C.
RCH/gj
Enclosure
cc: "Mr. Lee Fitzsimmons
Mr. Ray Moller, Director of Economic Development
(GloriaRCHLettersFitzsimmonsParkerLtr 05-03-00)
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CIAIII I11I1' EAST PARK PROFESSIONALCENTRE Q- O 1RidSITE PLAN s .1:� r �o
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Expenses
Water Main Replacement ($96,942) ✓
Street Improvements ($80,599-Seneca Street only)
��➢ Curbs and Gutter Improvements ($77,238) <7 Yd s S
Sidewalks ($58,351)
> Concrete Walls and Retention
Ponds ($60,132)
40
j Storm Sewers ($78,880)k0
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tY > Topographical Changes Site Balancing for Retention Ponds
• Site#1 ($56,625)
• Site#2 ($35,897)
• Site#3 ($44,970)
> Increased Parking Requirements ($15,084)
•
2 > Excavation Issues Related to
Previous Demolition ($20,000-$50,000?) ✓
Special Historic Lighting ($115,000)
> Added Security Lighting ($39,617)
> Environmental Cost ($20,000) ✓
> Survey ($2,500)
> Legal ($18,900)
> Extra Permits f gia C) ($60,000)
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Co e)iL to All Brick Structures / —
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> Paving
> Landscaping
Page 2
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EAST PARK PROFESSIONAL CENTRE
Benefits to the City
> TIF district taxes of$154,000 to $200,000 plus per year
> Employment opportunities
> Medical presence in neighborhood
> Raise security level in neighborhood
> Increase value of surrounding properties
> Less street maintenance
> Greater economic opportunities
Page 3
EAST PARK PROFESSIONAL CENTRE
I am submitting this request for financial assistance in reference to the three medical office
buildings,which are currently in the developmental planning stages.
Due to unforeseen building costs the project has become so costly that it is bordering on an
unfavorable venture. The infrastructure cost has escalated due to the necessity of replacing
the water main, curbs, gutters and sidewalks in addition to the expense of complying with
the city's desire for three buildings, special security lighting and many other amenities.
Vacating St. Johns Street by the City of Elgin will alleviate any parking shortage.
The total cost is projected in excess of$5,500,000. Therefore, I am requesting $814,000
from the city to help meet these costs and continue with the project.
I am certain you will concur with my request after measuring the project and it's associated
expenses,benefits, and monies involved against the finished product;a premium medical
facility which will benefit the City of Elgin.
Page l